Coldwell Banker Premier Realty

REITs. Have money, will travel


Cash burning a hole in the pockets of REITs but product to buy is scarce
Posted: February 05, 2010 by John McClelland

REITs have raised a lot of capital in the past year and they are locked and loaded for bear but they just can't find enough of them. A lot of the product that REITs like to aquire; apartments, office buildings, malls and warehouses have not been available. Current owners are hesitant to sell into a market where prices have needed a massive reset and they often keep performing assets for themselves. Additionally, banks are cautios about how they liquidate properties they have foreclosed on since they have to watch their ratios so closely. Relaxation of mark-to-market, while preventing a real pounding on bank balance sheets has also caused "extend and pretend" to be official policy. Extend and pretend is the modification of loans to forestal having to call some properties non-performing or having to take the property back. As a result of these actions, few properties have been available for purchase.

The Wall Street Journal has a good piece on specific REITs and what they are trying to do. Click Here

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